NEW YORK — At the Ghurka showroom in SoHo here, chief executive officer Arnold Cohen pulls out a $1,595 “Express 2” carry-on khaki, leather-trim duffel bag. It’s the enduring style Ghurka introduced when the company was founded 41 years ago with its “Original Collection.”
“There’s a sea of generic weekend duffel bags out there, but this one has personality,” Cohen said. “It’s not too big. It’s not too small. It’s got pockets. It’s functional, and it’s got a fun design. A whole new generation is finding this bag. It’s rare when someone says to you, ‘That’s a cool duffel bag.’
“The challenge we’ve had as a small American luxury brand was that we were doing the same product for literally 40 years. You can have a great product, but if you are not evolving, adding to your product mix and not offering newness, the business will stagnate.”
Ghurka is one of those brands that’s known but hardly grown. Yet over the past year and a half, a new team led by Cohen has been rolling out women’s handbags, luggage and small leather goods, widening distribution to upscale stores around the world and plotting a new approach to retail stores. There’s been a return to sourcing from the company’s original leather suppliers. The web site was overhauled so by last September it became user-friendly, added more content and had adopted a full-price orientation by shifting from monthly sales to a semiannual sale model. “We were promoting in a way that didn’t build a luxury customer,” Cohen said.
The spring 2017 campaign, launching next month, was photographed by Daniela Federici in The Rockaways to show men’s and women’s products, both classic and newer looks, reflecting the bid to broaden the customer base from predominantly male to both genders. A media push began earlier this fall; before, little was spent on marketing.
In addition, the brand’s wide-ranging Original Collection of luggage, duffels, small leather goods, business cases and umbrellas has been “rationalized” down to 150 products from 250, to focus on updated styles. “There’s so much product out there for consumers to pick from, we feel it’s our job to build a selection that homes in on key products and best sellers and makes the selection process easier,” Cohen said.
He sees 2017 as a break out year. “We will be profitable in 2017. We have invested in the product and we expect to invest in retail. We will move our Fifth Avenue store [in the Sherry-Netherland Hotel] to a more visible location with greater traffic. We are investing in global expansion in wholesale and distribution partners. We are in final contract negotiations with a well-established retailer-distributor in the Middle East for shops in Dubai, Kuwait and shops-in-shop in the Middle East and North Africa and in negotiations for a major distributor in Japan for flagship stores and shops-in shop.”
The business, he said, generates $10 million in volume, but as of Dec. 2, was tracking 19 percent ahead this year.
“We need to build brand awareness,” Cohen said. “You do it by cultivating a female consumer,” Cohen said. “At the end of the day, she influences so many of the purchases for men and women. Women are involved in like 85 percent of the men’s purchasing by actually making the purchase or advising on it.”
Cohen sees Ghurka following a classic industry pattern. “Look at how many great brands started out in men’s: Ralph; Tommy; Nautica; Levi’s; Brooks Brothers,” before expanding into women’s.
In women’s, 40 styles were added, including for fall 2016 the Lock and Dowel line of women’s military-style structured handbags in French calfskin, priced from $1,395 to $2,695; the Rugged travel-oriented line of modern Italian-made casual totes and duffels, priced from $595 to $1,425 and geared for younger, aspirational customers, and the top-priced Cerise unisex travel line in exotic skins, priced $5,250 to $5,650, which is made in the same northern-Italian factory that produces Ghurka’s hard-sided luggage.
The assortment breaks down into 22 percent men’s, 47 percent unisex, and 31 percent women’s. Previously, Ghurka had just four styles in women’s which were masculine in character, and wasn’t on a seasonal development calendar or producing full collections of new styles. Men’s products have been updated with color, textures, tech-friendly features and sharper opening prices to lure younger customers.
Ghurka also offers vintage products bought back by the company, refurbished and sold again, as well as the Ghurka Surplus line of products that are distressed and adorned with patches, stencils, hardware, straps, even pieces of military tents, and have a unisex appeal.
On the retail front, three pop ups were opened, in Phipps Plaza, Atlanta, the Americana Manhasset on Long Island and Sawgrass Mills in Florida. They will operate through the middle to end of January. Last year, Ghurka did two pop ups, in Short Hills, N.J.,and Cherry Creek, Colo.
“I’m a believer in test and tweak,” Cohen said. “Short Hills was very successful. We made money on the pop-up in four months. Cherry Creek was good. We simply stayed there too long….We are really trying to understand what the optimal retail model should be.”
A Fifth Avenue site is being sought to replace the shop inside the Sherry Netherland. Ghurka also has a shop on Prince Street in SoHo.
Over the past year and a half, the distribution has widened to Barneys New York’s eight full-price stores, barneys.com, nordstrom.com, neimanmarcus.com, the Mitchells Family of Stores, Antonia in Milan and Macao, Excelsior in Milan, Fortnum and Mason in London, and Lane Crawford in Hong Kong. “It took us a year to develop the product, the supply chain, the materials, and to come to market,” said Kathy Formby, the creative director.
Ghurka is owned by Brightwork Brand Holdings Corp., a private equity firm headed by John Reuter. Brightwork bought the brand — currently its only holding — from the Accessory Network Group which in 2003 acquired Ghurka from its founder, Marley Hodgson.
At some point Brightwork would want to sell Ghurka, though another ownership change doesn’t appear imminent. “Today we are focused on continuing to refine our product, and delivering on our growth initiatives,” Cohen said. “A liquidity event is not on our immediate horizon.”
The brand has in the past attracted interest from several potential buyers who see a small, quality business with cache, military inspirations and an aura of travel and adventure. It’s among the few true American luxury accessory brands along with Mark Cross.
As the story goes, Hodgson was at an estate sale in the U.K. in the Seventies where he saw old boots, belts and backpacks that belonged to a British Ghurka commander stationed in India at the turn of the century. Hodgson was so inspired by the lasting condition of the leather that he decided to create a leather collection that he named after the Nepalese soldiers who served the former British empire, the Ghurkas. He began production at a 5,800-square-foot factory in Norwalk, Conn., where today there are 15 employees who still hand-make the Original Collection portion of the assortment, and are led by foreman Luis Huerta, who has been there since the beginning.
“This man still stitches the bags himself. He’s a craftsman but so are all of his people,” Cohen said. Hodgson left long ago and now operates a private guest ranch in Colorado.
After Brightwork bought Ghurka, the heavy lifting began. Production was pulled out of China and refocused to Italy, Spain and the U.S. Two years ago, a new executive team was formed, with Cohen becoming chairman in 2015 and later that year adding the ceo title. Considered a creative executive and a brand builder, Cohen cut his teeth at Bloomingdale’s and Gucci America, had a successful stint running J. Crew but stepped into some tough situations leading London Fog, Cache and Today’s Man, which all fell on hard times.
Formby, who formerly worked at Ralph Lauren and Chanel, joined Ghurka in March 2015, and not long after, Drew Sheeran, previously with Gucci, Tod’s and Ermenegildo Zegna, became vice president of global sales. The team taps industry consultants including George Nunno, formerly with Coach and J. Crew, and Simonetta Morrison, who has worked at Saks Fifth Avenue, Roberto Cavalli, Salvatore Ferragamo and Bergdorf Goodman.
Despite all the investments and changes, “We’re not degrading the quality, the military inspiration, or our aesthetics at all,” Cohen said. “To the contrary, we are taking all that and modernizing. The basic principals of the brand, the soul of the brand, are in place. It’s really been a reinvigoration.”